CIO — Reader ROI
See how customer service needs prompt IT moves
Learn about Internet-based bids to enter a highly fractious and regulated market
Observe how industry flux forces players to alter IT strategies

When David Rager took the helm of the Greater Cincinnati Water Works in 1993, he walked into an operation of 600 employees servicing 1 million consumers—but functioning, for the most part, without the benefit of modern technology. In the field, workers completed preprinted cards to read customers’ water-usage meters, which were then read by a machine. The machine produced a tape that fed information to a 25-year-old mainframe-based billing system using homegrown software. Back in the office, the staff used dumb terminals connected to the aging mainframe to track collections of customers’ late payments as well as work-orders for maintenance projects.

CEO Rager quickly assembled a group of nine technologists on staff and an outside consultant who spent three months study-ing every part of the organization’s operations, from billing and customer service to water treatment and management. The group concluded that technology—lots of it—was the key to succeeding in the long term.

With an IT strategic plan in hand, Rager prioritized project implementations for the next six years based on which efforts would lead to improved operations, reduced costs and better customer service. The result: The agency now has client/server systems that include both Windows NT and Unix servers running on a Windows NT network and using an Oracle database. It also has upgraded its billing, collections and meter-reading functions by installing a customer management system designed for utilities from SCT Corp. in Malvern, Pa. It’s a system that the utility can use to anticipate customer call volumes and staff call centers accordingly. It also can help pinpoint customers who take advantage of early payment plans, Rager says. The changes came with costs too. Although the Water Works’ executives originally planned on investing $3 million to $4 million per year for five years on the upgrade, rapidly escalating IT costs—largely because of Y2K—forced the company to spend a total of about $35 million, Rager says. (The five-year plan’s stretching to six years also lifted costs.) In the process, the agency also cut 100 positions; most of those who remained were retrained to use the technology, such as how to run a fiber-optics network. "Maintenance staff who used to do largely just mechanical maintenance work now also performs electronic-circuit troubleshooting and repair," Rager says.

The seven-year metamorphosis of the Greater Cincinnati Water Works from a relative IT backwater to one where technology plays a central role is indicative of the seismic shift occurring in this industry. Water utilities are learning, slowly but surely, that technology is the best way to achieve their ultimate goals: elevating customer service, lowering costs and preparing for a future in which competition and consolidation are expected and the Internet creates both opportunities and challenges to keep up.

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